Credit Cards

HM Treasury written question – answered on 27th April 2017.

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Photo of Dan Jarvis Dan Jarvis Labour, Barnsley Central

To ask Mr Chancellor of the Exchequer, what plans he has to close the loophole of third-party payment systems severing ties between a consumer and a credit card supplier for the purposes of section 75 Consumer Credit Act protection.

Photo of Simon Kirby Simon Kirby The Economic Secretary to the Treasury

Section 75 of the Consumer Credit Act 1974 sets out the potential liability of creditors for breaches by suppliers in debtor-creditor-supplier agreements, so that credit card companies must take responsibility if a supplier cannot satisfy a consumer’s purchase. To fall within section 75, there has to be an agreement to finance a transaction between a debtor and a third party supplier and there must be existing arrangements between the creditor and the supplier.

If a credit card is used to pay through a third party intermediary service, the conditions in section 75 may not be met. This is the case where the supplier has an arrangement with the intermediary but has no arrangement or contact with the creditor. This aims to strike the right balance between consumer protections and proportionate burdens on business.

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